Is the New York Minimum Wage Hike Arbitrary and Capricious?

July 29, 2015 – In The News

The Restaurant Finance Monitor

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Carolyn D. Richmond was quoted in The Restaurant Finance Monitor article, "Is the New York Minimum Wage Hike Arbitrary and Capricious?" Full text can be found in the July 29, 2015, issue, but a synopsis is noted below.

In recent years, Andrew Cuomo, the Governor of New York, has made an effort to raise the state minimum wage. With both triumphs and failures, he has taken a different route in his most recent endeavor to increase the minimum wage for fast food employees to $15.

Carolyn D. Richmond explained that Cuomo has turned to a “wage board” instead of going the traditional route through legislature.

“The governor certainly tried to do it in what we call, ‘the right way’ going to the legislature in the past several terms and he was rebuffed,” said Richmond. “This is clearly an end run around it by trying to set up a wage board specifically for what I would call a sub, subset of the hospitality industry.”

While there is nothing illegal about wage boards, Richmond goes on to explain the history of wage boards and why Cuomo’s in particular is a bit odd.

“Wage boards go back to the 1930s. We probably had between 35 and 40 wage boards by industry,” said Richmond. “But over the years, largely thanks to legislation across the board, the need for the wage boards really fell to the wayside.”

“What’s particularly odd about this one – and I’ve been practicing law for 20 years – they’re usually much more well-rounded and fair,” said Richmond.

The current wage board consists of Byron Brown, mayor of Buffalo; Kevin Ryan, chairman and founder of the ecommerce fashion store Gilt; and Mike Fishman, secretary-treasurer of the Service Employees International Union. Those appointed to the board seem to have little experience regarding the fast food industry.

“It’s certainly a question of fairness,” said Richmond. “If you’re going to convene a wage board to look at a particular industry and the governor and the commissioner said that the concerns were the help and welfare of those who work in the fast food industry, wouldn’t you think at least you’d have someone on the board that had experience in the industry?”

With the hypothetical situation that minimum wage does increase to $15 per hour, Richmond has already heard from clients that they are looking to go elsewhere with their business.

“I certainly have heard from clients that they’re not going to be able to open in New York State,” said Richmond. “You have New Jersey and Connecticut clamoring for openings, and they’re looking for deals elsewhere.”